Response to ESMA's consultation on amendments to MiFID II RTS1

March 29, 2018

The NSA recognises ESMA’s intention to ensure a level playing field between the trading venues and SIs. However, it is of great importance to ensure that a level playing field goes both ways, which does not seem to be the case in the proposal, as it stands.
First of all, beware that trading venues easily can offer trading at midpoint, i.e. circumventing the tick size regime themselves. This can for example be the case in relation to trading under the reference price waiver, the negotiated trade waiver or the large in scale waiver. Furthermore, most trading venues offer additional trading methods in order to attract liquidity from SIs, i.e. Nasdaq offers Auction on Demand, in which trading at midpoint is doable. Similar initiatives can be found on other exchanges, most likely subject to some kind of midpoint peg, which is not tick size validated. 
Therefore, adopting a rule which will allow trading venues to continue circumventing the tick size regime, whereas SIs cannot, does not seem to be in line with a level playing field approach.

Read the whole response here: NSA_response_to_consultation_on_amendments_to_MiFID_II_RTS_1.pdf